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Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow E. a. Use the financial statements to complete the following table E. Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition. a. The current ratio is 1.04. (Round to two decimal places.) The quick ratio is .38. (Round to two decimal places.) The inventory turnover is 2.32. (Round to two decimal places.) The average collection period is 56.1 days. (Round to one decimal place.) The debt ratio is 61.7 %. (Round to one decimal place.) The times interest earned ratio is (Round to one decimal place.)

Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow E. a. Use the financial statements to complete the following table E. Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition. a. The current ratio is 1.04. (Round to two decimal places.) The quick ratio is .38. (Round to two decimal places.) The inventory turnover is 2.32. (Round to two decimal places.) The average collection period is 56.1 days. (Round to one decimal place.) The debt ratio is 61.7 %. (Round to one decimal place.) The times interest earned ratio is (Round to one decimal place.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow . a. Use the financial statements to complete the following table E. Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition. ..... a. The current ratio is 1.04. (Round to two decimal places.) The quick ratio is .38. (Round to two decimal places.) The inventory turnover is 2.32. (Round to two decimal places.) The average collection period is 56.1 days. (Round to one decimal place.) The debt ratio is 61.7 %. (Round to one decimal place.) The times interest earned ratio is |. (Round to one decimal place.)
Transcribed Image Text:Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow . a. Use the financial statements to complete the following table E. Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition. ..... a. The current ratio is 1.04. (Round to two decimal places.) The quick ratio is .38. (Round to two decimal places.) The inventory turnover is 2.32. (Round to two decimal places.) The average collection period is 56.1 days. (Round to one decimal place.) The debt ratio is 61.7 %. (Round to one decimal place.) The times interest earned ratio is |. (Round to one decimal place.)
Zach Industries Income Statement for the Year Ended December, 31, 2019 Sales revenue $160,100 Less: Cost of goods sold 105,500 Gross profits $54,600 Less: Operating expenses Selling expense $15,900 General and administrative expenses 9,700 Lease expense 1,040 Depreciation expense 9,600 Total operating expense $36,240 Operating profits $18,360 Less: Interest expense 5,900 Net profits before taxes $12,460 Less: Taxes 4,390 Net profits after taxes $8,070 (Click the icon here in order to copy the contents of the data table below into a spreadsheet.) Zach Industries Balance Sheet December 31, 2019 Assets Cash $530 Marketable securities 1,010 Accounts receivable 24,600 Inventories 45,400 Total current assets $71,540 Land $26,200 Buildings and equipment Less: Accumulated depreciation Net fixed assets 89,600 38,500 $77,300 Total assets $148,840 (Click the icon here in order to copy the contents of the data table below into a spreadsheet.) Liabilities and Stockholders' Equity Accounts payable Notes payable $22,100 46,900 Total current liabilities $69,000 Long-term debt $22,900 Common stock* $31,900 Retained earnings $25,040 Total liabilities and stockholders' equity $148,840 *The firm's 3,500 outstanding shares of common stock closed 2019at a price of $23 per share.
Transcribed Image Text:Zach Industries Income Statement for the Year Ended December, 31, 2019 Sales revenue $160,100 Less: Cost of goods sold 105,500 Gross profits $54,600 Less: Operating expenses Selling expense $15,900 General and administrative expenses 9,700 Lease expense 1,040 Depreciation expense 9,600 Total operating expense $36,240 Operating profits $18,360 Less: Interest expense 5,900 Net profits before taxes $12,460 Less: Taxes 4,390 Net profits after taxes $8,070 (Click the icon here in order to copy the contents of the data table below into a spreadsheet.) Zach Industries Balance Sheet December 31, 2019 Assets Cash $530 Marketable securities 1,010 Accounts receivable 24,600 Inventories 45,400 Total current assets $71,540 Land $26,200 Buildings and equipment Less: Accumulated depreciation Net fixed assets 89,600 38,500 $77,300 Total assets $148,840 (Click the icon here in order to copy the contents of the data table below into a spreadsheet.) Liabilities and Stockholders' Equity Accounts payable Notes payable $22,100 46,900 Total current liabilities $69,000 Long-term debt $22,900 Common stock* $31,900 Retained earnings $25,040 Total liabilities and stockholders' equity $148,840 *The firm's 3,500 outstanding shares of common stock closed 2019at a price of $23 per share.
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